A Simple 6-Step Process to Starting a Small Business

A great small business always starts out as an idea, but you have to transform that idea into action. That’s where many individuals can start to feel overwhelmed. It’s understandable to freeze up at the deluge of things that are required to get a business started, but getting going is actually easier than you might think.

Like any big goal, if you start by breaking it down into smaller tasks, you’ll be able to tackle enough of the actions necessary to get started. Here are six ways to break down the process and simplify getting started with your own small business.

1. Write a one-page business plan.

The key to a successful small business, especially in the startup phase, is to keep things simple and costs low. Costs don’t just mean your monetary costs, but also your time.

Many would-be small-business owners fall into the trap of trying to create the world's biggest and most robust business plan. You’re only going to need that if you’re seeking investment or financing, and even if you will be seeking either of those things down the road, I always recommend small-business owners start out with by testing their ideas first before investing lots of time and money.

Related: Why You Must Really Know Yourself Before Starting a Business

So to get started, create your own simple, one-page business plan that is a high-level overview of the small business you’re about to start.

  1. Define your vision. What will be the end result of your business? 
  2. Define your mission. Different to a vision, your mission should explain the reason your company exists.
  3. Define your objectives. What are you going to do -- what are your goals -- that will lead to the accomplishment of your mission and your vision?
  4. Outline your basic strategies. How are you going to achieve the objectives you just bulleted?
  5. Write a simple action plan. Bullet out the smaller task-oriented actions required to achieve the stated objectives.

That’s it. It might be longer than one page, but it will surely be more organized and shorter than a full business plan, which could take weeks to write. If you need more information on the one-page business plan, or want to write out a full-blown finance-centered business plan.

2. Decide on a budget.

While I highly recommend you keep your costs as low as possible, you’ll still need to determine a budget to get started and how much you’ll be able to spend. If you’re self-funding, be realistic about numbers and whatever you anticipate your budget to be. I’ve found that an additional 20 percent tacked on for incidentals is a realistic overage amount that helps you plan your burn rate.

Your burn rate is how much cash you’re spending a month over month. It’s an important number for you to figure out to determine how long you can stay in business before you need to turn a profit.

You should set up your business with profitability in mind the first 30 to 90 days. It’s possible. But have a budget reserve so you can survive if things go leaner than expected.

3. Decide on a legal entity.

Filing paperwork to start a business costs money. Often, depending on your state, it can be a lot of money. You’ll need to account for city or municipality licensing, state incorporation or business entity fees and more. Do a thorough search ahead of time to determine what the filing fees are for your city, county and state before starting any business.

Often in the initial “test” phase for your small business, it can be wise to start as a sole proprietor, as it means less paperwork and up-front expenses. That can save you some big-time cash while you determine the viability of your business. Do be aware though that acting as a sole proprietor can put you at personal risk, so you’ll want to weigh the benefits vs. risks and then speak with a local attorney or tax professional to decide which is smarter for your short-term vs. long-term goals.

You can always file for a business entity once you’ve proven in the first three to six months of business that you’ve got a viable, sustainable model.

4. Take care of the money.

Whatever business entity you decide on, keep the funds separate from your personal accounts. This is a big mistake that makes tax time and financials so confusing. It’s really easy to set up a free business checking account with your local credit union or bank. All you’ll need is your filing paperwork, sole proprietor licensing information and an initial deposit to get set up from most financial institutions.

Don’t pay for an account or get any kind of credit lines yet, just get a holding place you can keep your money separate from your personal accounts. This should take you no more than an hour at the financial institution of your choice.

5. Get your website.

Regardless of whether your business will be brick or mortar or online, you’ll need a website and that means securing a URL. Popular domain sites such as HostGator and Go Daddy will allow you to search for the website domain address of your choice and purchase it for as little as $9.99.

If you’re starting an online business, you can tie your domain to an online shopping cart and store front such as Shopify for a low monthly fee, or you can build a basic website yourself on top of your URL with do-it-yourself drag-and-drop site builders such as Weebly for a low fee. Both are less than $100 a month.

6. Test sales.

You have enough of a foundation now that you can start testing some sales. Try to spread the word in inexpensive and creative ways.

If you have a service-based business, get involved with your local chamber of commerce or small-business chapter immediately and ask what resources are available for you to speak, present or share information about your business. If you have a product-based business, test the viability of your product at local swap meets, farmers markets or other community events to test what the public really thinks (and if they'll purchase) from you.

Drive traffic to your website through simple Facebook Ads with capped budgets, or set up a simple Google AdWords account with a budget cap to test if traffic is going to your site.

You can follow these six steps by yourself for not a lot of money. It’s a fantastic way to test the viability of your small business before throwing all your time and money into an unproven idea.

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Business Leadership Training Tips to Keep Employees Happy

Even the best manager can learn from these business leadership training tips.

As a leader, it is essential to keep your team motivated if you want them to reach their goals. Over time, even the best manager can tire from the effort it can take to keep your team motivated.  Find new ways to keep your company moving forward in a positive direction with these business leadership training tips that will keep both your employees and your bottom line happy.

Find inspiration
Take a moment out of your busy day to get back to nature.  Go for a quiet walk and think about what really motivates you.  This will help you to more effectively visualize your goals so you can lead your team towards achieving those same objectives.

Let them know you care
One of the best business leadership training tips is very simple.  Show your team that you care about them and that you appreciate their efforts.  Sometimes the best employees are taken for granted, so make sure that they know you care.

Keep it positive
While this might sound a bit corny, it’s essential when leading a team to keep the negative thoughts and tendencies from impacting your workday.  Be positive and work hard to maintain an environment that empowers people instead of tearing them down.

Keep your team motivated
People work better when they have the proper motivation.  While a good salary is great, it’s usually not enough to keep employees happy. Find ways of rewarding good performance, especially those employees that go above and beyond.

Delegate to trusted employees
Employees that have proven themselves to have the company’s best interests at heart would likely welcome more responsibility.  Encourage them by delegating some work to them.  This will free up your team for other business leadership training efforts for new and creative ideas.

Do you want to generate more leads and close more deals? veridianfinance helps you to nurture relationships and win more customers with automated sales follow-up! Schedule a free demo and we’ll show you how our software can increase efficiency and improve sales at your company!

Demonstrate transparency
No employee likes being left in the dark.  When something arises that impact the department, their job, or the company, try your best to keep them informed as much as possible.

Praise in public and critique in private
This business leadership training tip is very basic.  Make sure that when your employee works on a project that is worthy of praise, do so in public such as at a departmental or company meeting.  But when you need to give an employee a good talking to, always do so in private. No one likes to be humiliated in front of their peers or superiors.

Give your employees a voice
Create a work environment that empowers your staff to voice their concerns and ideas.  Giving them a platform to share their knowledge will keep them happy and appreciated in a way that a mere salary alone could never do.

Perseverance is key to success
Every good leader knows that giving up when things get tough is never an option. But don’t allow your pride to keep you from refocusing your team’s energies from time to time.  Use the lessons learned from conversations with customers to ensure they persevere.

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What exactly do you need to consider when looking for the perfect premises?

A universal answer to the question of what makes the perfect office space doesn’t exist. The kind of space you need, and will be comfortable in, depends entirely on the type of business you’re running. The same goes for the amount of space needed per worker. If all you require is a small desk and a phone connection, you don’t need masses of square footage. However, if your office also acts as your shop floor – a place to meet with clients – you’ll want a bit more space and possibly a more attractive and accessible location.

When it comes to size, Ann Clarke, design director at Claremont Group Interiors, is reluctant to dwell on average measurements because of the varying nature of what you need the space for. “Organisations like the British Council of Offices have certain recommendations but they’re reducing all the time because space is becoming increasingly expensive,” she explains.

 

However, there are some rough industry standards. For example, a densely packed call centre can get away with about 6-7 square metres per head, but a professional services firm will need more like 10-12 to allow for consultation space for clients.

It’s also important to bear in mind how much of the space is actually usable, and this can be dramatically affected by the shape of the building. “There are lots of things that impact the efficiency of a space,” says Clarke. “The shape of a building, where the lifts and stairs are and the amount of circulation space all make a difference. It all depends on how the floor plate is laid out.”

Clarke says the ideal office has a usable space/circulation space ratio of 85:15. “Once it falls below 85% it can get difficult and you won’t be able to use the space efficiently.”

If you want to minimise the amount of square footage you need, Clarke advises implementing some clever desk policies. Just because you employ 50 people, it doesn’t mean you need 50 desks. Working practices such as desk booking and hotdesking can work wonders if many of your staff are only in the office at certain times during the day or week.

“Think long and hard about storage too,” urges Clarke. “Do you really need to store all that paper on site, or can it be stored digitally or moved to cheaper storage facilities? You should have a clear idea about how you’re going to manage your storage before you commit to a particular space.”

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How to Start a Consulting Business

Businesses certainly understand what consultants are. In 1997 U.S. businesses spent just over $12 billion on consulting. According to Anna Flowers, spokesperson for the Association of Professional Consultants in Irvine, California, the association has recently noticed an increase in calls for information from people who want to get into the business. "The market is opening up for [the consulting-for-businesses] arena," Flowers says.

Melinda P., an independent consultant in Arlington, Virginia, thinks more people are getting into the consulting field because technology has made it easier to do so. "The same technology that has helped me to be successful as a consultant has made it easier for others to do the same," she says.

A consultant's job is to consult. Nothing more, nothing less. It's that simple. There's no magic formula or secret that makes one consultant more successful than another one.

But what separates a good consultant from a bad consultant is a passion and drive for excellence. And--oh yes--a good consultant should be knowledgeable about the subject he or she is consulting in. That does make a difference.

You see, in this day and age, anyone can be a consultant. All you need to discover is what your particular gift is. For example, are you very comfortable working with computers? Do you keep up with the latest software and hardware information, which seems to be changing almost daily? And are you able to take that knowledge you have gained and turn it into a resource that someone would be willing to pay money for? Then you would have no trouble working as a computer consultant.

Or are you an expert in the fund-raising field? Maybe you have worked for nonprofit agencies in the field of fund-raising, marketing, public relations or sales, and over the years you have discovered how to raise money. As someone who has turned a decade of fund-raising successes into a lucrative consulting business, I can tell you that fund-raising consulting is indeed a growing industry.

Things to Consider Before You Become a Consultant

  • What certifications and special licensing will I need? Depending on your profession, you may need special certification or a special license before you can begin operating as a consultant. For example, fund-raising consultants don't need special certification, although you can become certified through the National Society of Fund Raising Executives. And in some states, you may need to register as a professional fund-raising consultant before starting your business.
  • Am I qualified to become a consultant? Before you hang out your shingle and hope that clients begin beating your door down to hire you, make sure you have the qualifications necessary to get the job done. If you want to be a computer consultant, for example, make sure you are up to date in the knowledge department with all the trends and changes in the computer industry.
  • Am I organized enough to become a consultant? Do I like to plan my day? Am I an expert when it comes to time management? You should have answered "yes" to all three of those questions!
  • Do I like to network? Networking is critical to the success of any type of consultant today. Begin building your network of contacts immediately.
  • Have I set long-term and short-term goals? And do they allow for me to become a consultant? If your goals do not match up with the time and energy it takes to open and successfully build a consulting business, then reconsider before making any move in this direction!

Top 20 Consulting Businesses Thriving Today

Although you can be a consultant in just about any field these days, the current top 20 consulting businesses include:

1. Accounting: Accounting is something that every business needs, no matter how large or small. Accounting consultants can help a business with all of its financial needs.

2. Advertising: This type of consultant is normally hired by a business to develop a good strategic advertising campaign.

3. Auditing: From consultants who audit utility bills for small businesses to consultants who handle major work for telecommunications firms, auditing consultants are enjoying the fruits of their labor.

4. Business: Know how to help a business turn a profit? If you have a good business sense, then you'll do well as a business consultant. After computer consulting, people in this field are the next most sought after.

5. Business writing: Everyone knows that most businesspeople have trouble when it comes to writing a report--or even a simple memo. Enter the business writing consultant, and everyone is happy!

6. Career counseling: With more and more people finding themselves victims of a corporate downsizing, career counselors will always be in demand. Career counselors guide their clients into a profession or job that will help them be both happy and productive as an employee.

7. Communications: Communications consultants specialize in helping employees in both large and small businesses better communicate with each other, which ultimately makes the business more efficient and operate smoothly.

8. Computer programmer: From software to hardware, and everything in between, if you know computers, your biggest problem will be not having enough hours in the day to meet your clients' demands!

9. Editorial services: From producing newsletters to corporate annual reports, consultants who are experts in the editorial field will always be appreciated.

10. Executive search/headhunter firms: While this is not for everyone, there are people who enjoy finding talent for employers.

11. Gardening: In the past decade the demand for gardening consultants has blossomed (pun intended) into a $1 million-a-year business. Not only are businesses hiring gardening consultants; so are people who are too busy to take care of their gardens at home.

12. Grantsmanship: Once you learn how to write a grant proposal, you can name your price.

13. Human resources: As long as businesses have people problems (and they always will), consultants in this field will enjoy a never-ending supply of corporate clients, both large and small. (People-problem prevention programs could include teaching employees to get along with others, respect and even violence prevention in the workplace.)

14. Insurance: Everyone needs insurance, and everyone needs an insurance consultant to help them find the best plan and pricing for them.

15. Marketing: Can you help a business write a marketing plan? Or do you have ideas that you feel will help promote a business? If so, why not try your hand as a marketing consultant?

16. Payroll management: Everyone needs to get paid. By using your knowledge and expertise in payroll management, you can provide this service to many businesses, both large and small.

17. Public relations: Getting good press coverage for any organization is a real art. When an organization finds a good PR consultant, they hang on to them for life!

18. Publishing: If you're interested in the publishing field, then learn everything you can and you, too, can be a publishing consultant. A publishing consultant usually helps new ventures when they are ready to launch a new newspaper, magazine, newsletter--and even websites and electronic newsletters.

19. Taxes: With the right marketing and business plan (and a sincere interest in taxes), your career as a tax consultant can be very lucrative. A tax consultant advises businesses on the legal methods to pay the least amount of tax possible.

20. Writing services: Anything related to the written word will always be in demand. Find your specialty in the writing field, and the sky will be the limit!

Target Market

Your idea may be the best one you have ever thought of, but there needs to be a market for your ideas. Someone must be willing and able to pay you for your expert advice.

In other words, who are your potential clients? Will you be marketing your consulting services to large corporations? Or will you offer a specialty that would only be of interest to smaller businesses? Perhaps your services will be sought after by nonprofit organizations. Whatever the case, before you go forward, make sure you spend time preparing both a business plan and a marketing plan. You won't be disappointed with the results--especially when clients begin paying you!

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Discrimination Settlements and Tax

You work hard for your employer, however, throughout your employment, you are discriminated against, due to your age and disability.

Eventually, you have had enough.  After a long process which resulted in your lodging a claim with the employment tribunal, your employer agrees to make an out of court settlement to compensate you for the discrimination you suffered.

The discrimination payment is paid to you, however, it is paid net of income tax.

You question this and are told that because the payment is being made in connection with your employment it is correct to pay income tax on the settlement figure.

This position is not correct! We have helped many clients reclaim income tax which has been incorrectly deducted from their settlement figures.

A discrimination payment is not a reward for service, far from it in fact, and should not be taxed as employment income.

In some cases, a discrimination payment may be taxed in accordance with the rules which apply to termination payments.  However, this is only where the discrimination is in connection with the termination of the employment itself.

In all other cases, it is our view that a reward paid in respect of discrimination occurring before the termination of the employment should not be taxed.

This is a complex area of tax law and it can be quite difficult to identify the value of any settlement which should have been paid tax-free.

However, we have successfully supported clients in obtaining refunds where settlements awarded for discrimination, personal injury, disability and injury to feeling have been taxed incorrectly and are leading experts in this area.

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Growing pains can be fatal

Too many well-established businesses can become fatally unhealthy because owners impulsively decide to grow them. Having survived the first three years after start-up, when one in three businesses fail, an owner will launch an expansion program on the basis of perceived market opportunities without a proper understanding of its complexities.

There are three fundamental causes of catastrophic business growth.

  • A rule of thumb is that if a business’s turnover is growing by $1m annually and it’s making $600,000 profit, then it needs to have on hand another $400,000 to fund growth and as a buffer against unforeseen circumstances.
  • Businesses attempt to grow when fundamentally they’re not profitable. Lack of cash is one manifestation of an unprofitable business.
  • Businesses are put in growth mode with insufficient working capital to pay for long-term assets like new plant. Trouble ensues when owners lose sight of what’s happening with profitability and cash flow.

Business owners contemplating a growth program must have an understanding of working capital absorption ration. This enables an owner to know how much working capital they require to increase sales by a specific number.

Business owners can blame virtually any factor or number of factors causing pain in their processes of growth, but it is at least one of the above three disruptions that may well kill the business.

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Unpaid Business Taxes: How to Settle Your Debt and Avoid Bankruptcy

If your business is in danger of facing bankruptcy, there may still be a way to avoid it. The ramifications for a business bankruptcy is pretty dire and can affect not only your business but other companies who are involved with you in hopes of improving their own efforts toward success. By declaring bankruptcy, you are opting out of paying your debts to these companies that are expecting money from you. This, in turn, affects their business’ bottom-line revenue, because now they’re taking a loss.

Bankruptcy. Not Cool. Not Cool at All!

Imagine if you loaned a friend $100 who promised to pay you back. That’s $100 that you’re expecting to put back in your bank account. You may have already spent that those funds trusting that your friend is going to make good on his or her promise—especially if there was a signed agreement that he or she signed. Then next month, they file for bankruptcy! What does that mean for you? It means that you’re out of $100 and if you jumped ahead and spent that promised money, then that snowballs into another debt that won’t get paid, or money taken out another stream of revenue to supplement the loss.

Either way, it doesn’t look good for you.

When you file for bankruptcy, you’ll suddenly understand the origin of the term, “You’ll never do business in this town again!” because no one will want to conduct business with someone who can’t successfully manage a business.

Bankruptcy is Avoidable!

One way you can settle your business debts is to negotiate with each of your debtors to accept a reduced payment to settle the loan. Many businesses will gladly accept that than nothing at all once they learn that you’re going out of business. In fact, they will appreciate your efforts of coming to them first trying to work something out rather than leaving them high and dry.

This may sound pretty simple, but before you start making negotiations, you’ll first need to prioritize your debts. There’s still payroll and payroll taxes that need to be met as well as other business expenses like rent/mortgage and utilities. Make a list of all the most pressing debts that your business has and address them accordingly.

Still, Need Help?

Even with prioritizing your debts, deciding which businesses get paid and which ones don't can still be a painful process. Another way to settle your debt and avoid bankruptcy is to let the tax experts handle everything.

Success Tax Relief has over 30 years of experience getting people out of tax debt, whether it’s personal or business-related. We specialize in audits, Offer in Compromise, tax preparation, installment agreements, personal credit counseling and helping you re-establish your business credit. Read all of the services we have to offer here.

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WHY DIFFERENT COMPANIES PAY DIFFERENT TAXES

Corporate tax is defined as “an assessment levied by a government on the profits of a company. The rate of corporate income tax paid by a business varies between countries, although since corporations are legal entities distinct from their owners and operators, they are typically taxed as if they were people.”

Generally, the tax code favors some activities and investments over others, and creates opportunities for certain firms that others can’t use. Amazon, given its widely known success, is widely known as the model corporate income taxpayer. Some say it is absent from the ranks of top taxpayers of Corporate America’s giants.

writes that Amazon’s 93.3 percent effective rate appears to substantial, “given that the statutory top income rate for partnerships in the U.S. is 35 percent (39.1 percent when you factor in state wage charges).” Their corporate rate of 93.3 is the most noteworthy of any G-20 nation, as indicated by the Congressional Budget Office.

Amazon’s corporate salary assessment charges are small, however, in light of the fact that its corporate pay is small. Wal-Mart, for example, has a pre tax wage that has totaled $209 billion since 2008, while Amazon remains at a relatively underwhelming number at under $11 billion.

Organizations face high tax rates because they have trouble shifting operations into a lower tax bracket. Then again, organizations that face high assessment rates have a tendency to have U.S.-concentrated organizations and a higher dependency on the tangible.

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